Measuring your business performance is a difficult task, but if not done with care and the right tools. Some mistakes businesses commonly make is using KPIs not specific to your business and ones that focus on actions, not results. Other mistakes include staff not engaging with the business’ desired results and searching for the nonexistent “perfect measure”.
If there is one thing that we are really good at, it is measuring things. If it moves, measure it. If it doesn’t move, measure how long it stays still. We are convinced that if we can measure it, then we can manage it. And the result? We spend more time measuring than managing.
Most analyse all sorts of metrics to see whether their product has got mojo. Some look at repeat visitation, user engagement, session time, organic growth, virality coefficient etc. These are all fabulous metrics and you can’t live without them. Yet, there is one super simple metric that tells you whether you have a product that users love.
The trouble with performance measurement is that it tempts us with an illusion of control and a promise of accountability. We begin to believe that organisations can be engineered according to our desires and that measures and targets can give us the ultimate control over what happens tomorrow. But when measurement becomes a substitute for judgement, disaster is often just around the corner.
The challenge for organisations today is how to match and align performance measures with business strategy, structures and corporate culture, the type and number of measures to use, the balance between the merits and costs of introducing these measures, and how to deploy the measures so that the results are used and acted upon.